We are downgrading our recommendation on
Liberty Interactive Corp.
) to Neutral based on its current valuation, which soared nearly
25% in the last year. We believe the stock is currently fairly
valued. Meanwhile, the company continues its robust performances
as the third quarter of 2012 financial results outperformed the
Zacks Consensus Estimates.
In our view, the TV home shopping business will continue to
flourish in the near future. The prestigious QVC division of
Liberty Interactive continues to perform exceptionally well. The
QVC shopping network has successfully transformed itself into a
powerful global brand, which may facilitate Liberty Interactive
to boost its revenue in double digits. The strategic move taken
by management to offer QVC programs on mobile platforms, such as
smartphones and tablets, was a huge success. Further, Liberty
Interactive is continuously generating positive free cash flow to
sustain its future endeavors.
Liberty Interactive's QVC division has become the undisputed
market leader in the $8 billion TV home-shopping business.
Currently, QVC commands an estimated 69% market share, far ahead
of its nearest rivals,
ValueVision Media Inc.
). TV home-shopping business is characterized as having quite
stable customer base, generally women. QVC accounts for over 11
million customers in the U.S., which is expected to grow in the
Recently, QVC bought 4.8 million shares of
) commons stock for approximately $300 million. TripAdvisor is
the world's largest travel site, which allows users to post
reviews of airlines, hotels, and vacation resorts throughout the
world. With this transaction, Liberty Interactive currently holds
about 22% of the equity and 57% of the total votes of all classes
of TripAdvisor common stock.
HSN INC (HSNI): Free Stock Analysis Report
LIBERTY M INT-A (LINTA): Free Stock Analysis
TRIPADVISOR INC (TRIP): Free Stock Analysis
VALUEVISION CLA (VVTV): Free Stock Analysis
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